It should not be a surprise that tech industry titans, including Microsoft's chairman and former CEO, Bill Gates, are pushing the US to dramatically increase spending for clean energy technology. The IT links to clean technology get stronger by the day, and if the push in Washington by Gates and venture capitalist John Doerr to get the federal government to triple its research and development spending succeeds, Silicon Valley is certain to benefit.
One person who illustrates the multidimensional connections among IT, federal funding and clean tech is Gene Wang, CEO of People Power Co.
Wang's 18-month-old company has developed what it calls an Open Source Home Area Network (OSHAN) that connects household appliances and other energy-using devices to a web-based portal for energy tracking. It has a kit, called SuRF, for Sensor Ultra-Radio Frequency that developers can use to create wireless energy sensors.
Wang's company is funded through venture capital but also with federal help, through a US Small Business Technology Transfer (SBIR) grant, which was announced by the US Department of Energy. Wang has a long history of working in IT, including a job as a vice president of marketing for HP's handheld business unit. He also incorporates IT's open source ethos in his approach.
At a press conference today to release a report on clean tech, both Doerr and Gates said the US needs to triple its research and development spending from $5 billion to $16 billion if it wants to achieve global leadership in this area, in much the same way it has achieved leadership in biotechnology and IT.
Doerr, Gates and other business leaders were due to meet later Thursday with President Barack Obama.
Wang said China, in particular, is focusing billions of dollars on green technologies. "We somehow have this picture that the Chinese are good low-cost manufacturers but they don't have good engineering, and while there still may be some truth to that depiction, it is really by and large not the case. So we had better really watch out and double and triple down on our priorities," Wang said.
But the US also has an obligation to the world to adopt clean tech, because if its huge energy consumption on a per capita basis, Wang said. The US has been investing heavily in smart grid and smart meter technology, but Wang said the focus is too narrow. "Smart meters actually remove jobs, smart meters really benefit the utilities," he said.
While Wang sees the benefit of gathering information over a network instead of relying on meter readers, "that's not the kind of innovation breakthroughs we need," he said.
If the US steps up its research and development spending on clean tech, Silicon Valley will likely benefit. Today the valley gets about one third of US venture capital funding, said Stephen Levy, director and senior economist of the Center for Continuing Study of the California Economy (CCSCE) in Palo Alto. Federal dollars make up some share of that VC funding, he said.
"The R&D funds are nice, but the big impact will be from companies starting to build on the R&D," Levy said. "Silicon Valley grows based on being a site for the next round of innovation," and clean tech and energy efficiency are certainly "candidates for the next big round of innovation."